Archives For Globally Networked Customs

The Hindu Times reports that the World Customs Organization (WCO) will soon bring out guidelines on ‘cross-border e-commerce’, which will focus on preventing illegal trade as well as addressing the challenges stemming from the ‘digital divide’, according to the WCO Secretary General Kunio Mikuriya.

In an interview to The Hindu on his recent India trip, Mr. Mikuriya said, “We are developing guidelines on e-commerce to see how best Customs can facilitate legitimate trade through that route.” He added, “We [the WCO] will address issues related to digital divide by looking into what is blocking e-commerce trade, and what kind of enabling environment is needed to support developing countries so that they benefit more from e-commerce.”

Terming e-commerce as a “game changer” in global trade that is benefiting small firms and consumers, he said the new guidelines would, however, include provisions to prevent illegal trade and illicit financial flows. This would be ensured through measures that would help strengthen information exchange between Customs administrations of countries as well as collaboration with other government agencies.

The WCO has a Working Group on e-Commerce and four sub-groups. To develop guidelines on cross-border e-commerce, the work packages identified are: ‘trade facilitation and simplification of procedures’, ‘safety and security’, ‘revenue collection’, and ‘measurement and analysis’. According to the UN body ‘UNCTAD’, the value of online trade jumped from $16 trillion to $22 trillion between 2013 and 2015.

“The continuous increase in online trading has raised questions regarding regulation, consumer protection, revenue collection and national security,” according to the WCO’s ‘Study Report on Cross-Border E-Commerce’ (March 2017). “These questions cannot be dealt with individually, but require a common, broad approach by the international Customs community, together with all relevant stakeholders as a whole.”

The WCO said more sophisticated equipment was needed to combat illicit trading through low-value shipments in the postal, express and cargo streams.

“Pre-arrival information on the consignment and the consignee could be of great importance in detecting and intercepting illicit trade. In addition, the improvement of non-intrusive inspection equipment and an increase in the number of trained staff could help to enhance the detection rate of illicit goods,” it said.

In an article on e-commerce, the WCO’s Director of Compliance and Facilitation Ana Hinojosa pointed out that in many countries, there were de minimisthresholds that allow low-value packages to enter a country with little or no duties or taxes, and with much more simplified procedures.

“This has led to clever manipulations by either the shipper or the consumer to avoid the extra charges by splitting invoices, undervaluing the invoices or mis-declaring the items altogether,” wrote Ms. Hinojosa. Another type of manipulation used was to classify the item as something else or claiming a different country of origin for the product, to take advantage of better duty or tax rates, the WCO official said, adding that these distortions had had an impact on many countries’ revenue collection volumes. Therefore, “some countries… are re-evaluating their established thresholds due to the significant implications that the changes brought about by these growing volumes of low-value small packages are having on their fiscal revenues,” observed Ms. Hinojosa. Source: The Hindu, 2 August 2017.

Yes, the info junkie I am – this is what I was really after! The WCO chose to delay the real stuff. The WCO has published its Transit Guidelines, and a substantial compendium its is. Click here to access/download the file (5,4MB)! The WCO Secretary General, Kunio Mikuriya, has noted the possibility of developing a separate publication on transit encompassing national or regional best practices.

At the recent conference on transit, particular attention was given to the difficulties faced by landlocked developing countries. During a special session on the issue, the United Nations Office of the High Representative for the Least Developed Countries, Landlocked Developing Countries and Small Island Developing States (UN-OHRLLS), several concrete suggestions were made on how to turn land-lockedness into land-linkedness. The Director General of Paraguay Customs indicated that trade transactions in his country incur 30% additional costs due to Paraguay’s geographical limitations. The Representative from UN-OHRLLS confirmed that on average, LLDCs bear up to 40 % additional costs on trade transactions. The investment being made in hard infrastructure, such as roads, rail infrastructure, intermodal logistical hubs and dry inland ports, remains one of the main priorities in order to improve the situation. Participants confirmed the need for harmonization and simplification of border control procedures, as well as the promotion of ICT for the management of transit systems. This is of significant importance to LLDCs in Africa of which there are eight!.

Representatives from several of Africa’s Regional Economic Communities present at the Conference, such as the Common Market for Eastern and Southern Africa (COMESA) and the Economic Community of West African States (ECOWAS), also highlighted the need to ensure that establishment functioning legal frameworks are in place to address the main challenges of regional transit regimes.

The use of existing information and communication technology (ICT) solutions was also raised at the Conference. Today, numerous technologies are available to secure the movement of goods, such as electronic Customs seals which are actively used on containers transported from China to Europe and have proved to be reliable and efficient. The regional electronic tracking system used for goods transiting between Uganda, Kenya and Rwanda was also mentioned as a successful project resulting from cooperation between neighbouring Customs administrations. The Representative from ECOWAS informed participants that work has started to connect the IT systems of ECOWAS Members. Regarding the challenges related to interconnectivity, the benefits of global implementation of the WCO Data Model were pointed out.

Railway transport is playing an increasingly important role in moving goods between countries in Eurasia, as explained by the Representatives from China and Russia Customs as well as the Representative from the Intergovernmental Organisation for International Carriage by Rail (OTIF). It was pointed out that block trains now bring goods from China to Europe through Russia and Central Asian countries within a fortnight; four times faster than via maritime routes. It is worth nothing that in the absence of a global instrument regulating the movement of trains across borders, which would obviously be of benefit to transit operations, bilateral agreements are the norm.

Transit systems, such as the European Union’s New Computerised Transit System (NCTS), the Convention on International Transport of Goods Under Cover of TIR Carnets (TIR Convention) and relatively new transit facilitation initiatives in the Eurasian Economic Union (EEU) and the Central Asia Regional Economic Cooperation (CAREC), were also discussed in detail. Turkey, a user of two transit systems – NCTS and TIR – highlighted the importance of digitalization of the transit processes and explained its involvement in the e-TIR project aimed at providing an exchange platform for all actors (Customs authorities, holders and guarantee chains) involved in the TIR system. In this regard, Turkey has participated in two pilot projects with two neighbouring countries, namely Georgia and Iran. Source: the WCO

At least 30 representatives of the Southern African Customs Union (SACU) recently met in Maseru – capital of the ‘Mountain Kingdom’ – Lesotho, to undertake a 5-day training workshop on the WCO Data Model, between 29 May to 2 June.

The training formed part of capacity building support to Member States to implement IT connectivity and information exchange between SACU Customs Administration. The training was facilitated by WCO Data Model Expert, Mr Carl Wilbers from South African Revenue Service (SARS) and GEFEG.FX software tool Expert, Mr. Martin Krusch from GEFEG, Germany.

The recent ratification of Annex E to the SACU agreement – on the use of Customs-2-Customs (C-2-C) Data Exchange between member states – paves the way for participating countries to exchange data within the terms of the agreement on the basis of the GNC Utility Block, also greed to by the respective member states. It also coincides with recent work on the establishment of a SACU Unique Consignment Reference (UCR) which must be implemented by the SACU countries in all export and transit data exchanges between themselves, respectively.

Just recently, in May 2017, the heads of SACU Customs administrations were presented a prototype demonstration of data exchange between the respective systems of the South African Revenue Service and the Swaziland Revenue Authority.

The WCO Data Model provides a maximum framework of standardized and harmonized sets of data and standard electronic messages (XML and EDIFACT) to be submitted by Trade for Cross-Border Regulatory Agencies such as Customs to accomplish formalities for the arrival, departure, transit and release of goods, means of transport and persons in international cross border trade.

The course was extremely comprehensive, providing SACU customs users the full spectrum of the power and capability which the GEFEG.FX software tool brings to the WCO’s Data Model. GEFEG is also the de facto Customs data modelling and data mapping tool for several customs and border authorities worldwide. It significantly enhances what was once very tedious work and simplifies the process of mapping data, ensuring that the user maintains alignment and consistency with the most up-to-date version of WCO data model. One of the more significant capabilities of the GEFEG.FX software is its reporting and publishing capability. For examples of this please visit the CITES electronic permitting toolkit and the EU Customs Data Model webpages, respectively. Pretty awesome indeed!

Users had the opportunity of mapping the SACU agreed data fields both manually as well as using the tool. The SACU group was able to add additional enhancements to its agreed data model, providing an added benefit of the work session.

As national Customs administrations and border agencies celebrate International Customs Day, no doubt showcasing their recent ICT endeavours, it is good to reflect not only on the available standards and tools which are becoming more available to Customs and Border Management Agencies.

The WCO spearheads and supports several initiatives aimed at fostering increased coperation and collaboration between member states under the banner of ‘Digital Customs’. In the post security era, throught is capacity building arm, the WCO champions global development of its Digital Customs concept and strategy. The WCO’s work programme in this regard covers a broad area of focus, for example:

exchange of information between stakeholders nationally and accross borders, and

promotion of the Single Window concept.

For most customs and border administrators, they have somewhere heard of, or to some extent are aware of the ‘buzz words’. The various chapters of the WCO through the working groups provide up-to-date developments in all facets on developments in the modern Customs operating and global trade environment. These are ably supported by several internal business organisations and umbrella associations adding credence to the developmental work and ultimately the standards, policies and guidelines published by the WCO.

In this modern era of uncertainty – global political and socio-economic risks – International Customs Day should be a combined celebration not only for Customs, but moreover, the associated supply chain industries and business intermediaries. If there was no trade in goods there would be no Customs or WCO. Without the providers of ‘big data’ there would be no need for data analysis. Without illicit activities there would be no need for expensive enforcement technology and equipment and the application of risk management.

Thanks to an imperfect and unequal world the WCO, through its association with the world’s customs authorities, big business and ICT service providers is able to develop a Digital Customs Maturity Model, which provides a road map for administrations from the least to most developed (mature rather). The pace and extent of maturity is undoubtedly determined by a country’s discipline and agility based on a clear strategy with the support and commitment of government and allied industries.Happy Customs Day!

SARS has been operating Electronic Data Interchange (EDI) with its external stakeholders since 2001. More than 98% of all customs declaration (CUSDEC) transactions are today submitted electronically to Customs and the electronic submission of multimodal cargo reports (CUSCAR) is steadily increasing. Today, declaration processing is fully electronic end-to-end thanks to the availability of highly established EDI and Customs software service providers supporting the local customs and logistics community. SARS has also recently introduced a benefit for compliant cargo reporters who will be absolved of certain manual (paper) submission requirements once they attain an acceptable level of electronic submission compliance and data accuracy.

The ultimate objective is to ensure that all Customs-to-Business (C2B) transactions are electronic to enable full supply chain connectivity between the South African business community and Customs. This in turn enables the possibility of SARS accrediting or approving ‘supply chains’ as opposed to just individual trader segments (importers and exporters). The extent of electronic compliance is also a pivotal requirement for traders operating under the new Customs Control Act, to be enacted in the future.

SARS overall EDI capability extends further than declarations and cargo reports. In recent years Customs-to-Government (C2G) messaging has also been successfully established between SARS and the Department of Trade and Industry (dti) as well as the South African Reserve Bank (SARB). SARS is also engaging other government stakeholders concerning IT connectivity and data exchange.

Moreover, developments for cross-border Customs-to-Customs (C2C) data exchange are also in the pipeline and could come to fruition with the partner administrations in Mozambique and Swaziland in the foreseeable future. These initiatives will usher in increased supply chain connectivity through active use of the Unique Consignment Reference (UCR) between participating customs administrations. The ultimate objective here is the creation of mutual recognition benefits for local and cross-border traders based on their accreditation status agreed between the participating customs administrations.

The SARS Electronic Data Interchange (EDI) Manual (which can be downloaded from the SARS EDI webpage) has been updated with the latest versions of SARS Edifact Data Mapping Guides as well as improved diagrams explaining the functional composition of the various electronic messages specified for Customs processing. Also included are the requirements for registering as an EDI user with SARS.

The manual includes recent updates relating to cargo reporting (manifests) as well as the updated customs declaration message incorporating recent inclusion of customs surety, penalty and forfeiture requirements. The latter enhancement removes another document based requirement (the Form DA70 Provisional Payment) for Customs Brokers with the view streamlining data requirements, enhancing customs billing and customs status reporting with the trade and logistics community. This EDI Manual will be an important document over the coming months and years in that it will feature updated electronic requirements in support of the new Customs Control Act. Watch this space!

Officials of the South African Revenue Service (SARS) last week attended a WCO workshop on the Data Model facilitated by Ms. Sue Probert and Mr. Giandeo Mungroo. The event, held in Pretoria, South Africa was sponsored by the CCF of China as part of the WCO’s Capacity Building endeavours to promote the adoption and use of customs standards and best practice amongst it’s member states.

The workshop was requested by SARS ahead of new technical and systems developments and requirements informed by SARS’ new Customs Control and Duty Acts. Moreover, there are also political ambition to institute a Border Management Agency for the Republic of South Africa. All of this requires that SARS Customs has a robust electronic tool to assist the organisation in mapping national data requirements according to specific needs.

Besides the use of a value added Data Model tool – GEFEG, it is imperative for the organisation to develop capacity in the knowledge and understanding of the WCO Data Model. SARS has successfully EDI (Electronic Data Interchange) for the last 15 years with various local supply chain trading partners and government agencies. Over the last few years SARS has been actively pursuing and promoting IT connectivity with regional trading partners with the express purpose to extend the benefits of eCommerce across borders.

GEFEG.FX software is used to model data formats and develop implementation guidelines for data interchange standards such as UN/EDIFACT. It is a software tool that brings together modelling, XML schema development, and editing of classic EDI standards under a unified user interface, and supports the development of multilingual implementation guidelines.

Version 3 of the WCO Data Model brought about a distinct shift towards an ‘all-of-government’ approach at international borders with the introduction of the GOVCBR (Government Cross Border Regulatory) message. The message and underlying data requirements facilitate the exchange of customs and other government regulatory information to support a Single Window environment.

WCO Data Model not only includes data sets for different customs procedures but also information needed by other Cross-border Regulatory Agencies for the cross-border release and clearance at the border. The WCO Data Model supports the implementation of a Single Window as it allows the reporting of information to all government agency through the unique way it organizes regulatory information. This instrument is already 10 years old and is seeing increased use by WCO members.

Amongst the benefits derived from the workshop, SARS staff acquired the following competencies that will not only aid their work but business user support as well –

Competence in operating the tool to build a source control collaborative environment to support national and regional harmonization;

Competence to build a base to conduct national/ regional data harmonization based on the WCO Data Model to support national Single Window implementation as well as Regional Integration;

Competence to build systems/ electronic interfaces between Customs and its partner government agencies including a Border Management Agency; and

Provide needed competence to develop, maintain and publish national and regional information packages based on the WCO Data Model.

The WCO launched its national Customs Enforcement Network (nCEN) application in Botswana in October 2014. Following the pilot projects in Mauritius and Kenya, the nCEN is already operational in Namibia, Swaziland, and the Seychelles, providing these countries crucial opportunities for regional cooperation in the enforcement field.

After an official meeting in Gaborone with the Executive Management Committee as well as with the General Managers of Botswana Unified Revenue Service, the WCO delegation conducted an eight-day nCEN Workshop intended to provide local officers with the necessary knowhow about the nCEN application, with an ultimate goal of improving the operational efficiency and analytical possibilities of their Administration. The workshop also touched upon the other WCO applications, giving valuable insight on the additional data mining and information exchange potential of the CEN suite.

The launch of the nCEN application in the region is financially supported by the Finish government as a component of the WCO project “Building Trade Capacity through Customs Modernization in the East and Southern Africa Region”, aiming at providing Customs Administrations with the necessary hardware and software as well as related knowledge and skills to implement simplified and improved customs procedures with modern customs operational techniques.

The nCEN application consists of three independent databases (a seizure database, a suspect database, and a company database), as well as a communication component. The core database of national seizures and offences comprises data required for analysis, including means of conveyance, routes, and the possibility to view photos depicting exceptional concealment methods. Two supplementary databases contain information on suspected persons and offending business entities, facilitating a structured investigation process.

The nCEN software is a free application for all WCO Members. The costs of the hardware needed to run the nCEN application, the costs associated with the training, and possible costs for modifications to the local IT infrastructure (if applicable), are however the responsibility of the implementing Customs Administration. Source: WCO

Since July 2014, EAC revenue officers work together to facilitate trade within the community. Some improvements remain made; the Single Customs Territory (SCT) does present some advantages. Since the single customs territory is operational, clearing processes are established in the country of destination while the goods are still at the port of Dar es Salaam”, explains Leah Skauki, a SCT liaison officer at the Tanzania Revenue Authority (TRA).

Once the declaration is over, when custom duties and taxes are paid, TRA verifies the physical goods. “The office grants a notification testifying that the goods fulfil all requirements in order to get the exit note.” Within the new system, the number of weighbridges and non-tariff barriers are reduced because “truck drivers only have to show the documents which certify that the goods have undergone verification.”

Massoundi Mohamed Ben Ali, Administrative Director in Charge of Human Resources and Import – Export at the Bakhresa Grain Milling Burundi, is pleased with the new development. “Before the system was implemented, Bakhresa used to import 3800 Tonnes of wheat (40 trucks) and we were obliged to declare each truck with a different clearing agent. We now fill in one statement with one clearing agent. The procedures are done quickly with a small of amount of money”, he points out.

Clearing agents testify that the number of statement on the borders is reduced. “Before, transporters had to fill in a transit declaration (T1) on each border”, one of the clearing agents in the Dares Salaam port relates.

Aimable Nsabimana, a focal point of SCT in Dar es Salaam for the Burundi Revenue Authority, indicates that the computerised system they use is different in each country.”It is not easy to exchange data. We are forced to print documents for verification. And when the goods arrive in Tanzania, they are in the hands of the TRA which has its own software”, he notes.

Inter-connectivity of software would facilitate verification and avoid fraud. This opinion is shared by many clearing agents: “If we were interconnected, the Tanzanians would be able to easily access Burundian data and vice versa”, one of them says.

Léonce Niyonzima, programme and monitoring officer at OBR and the national coordinator of SCT, agrees that the lack of interconnectivity causes delays in the transmission of documents.

He says that all EAC countries should have been interconnected by June 2014, but due to technical problems Tanzania and Burundi still lag behind. “There is a technical committee responsible for monitoring and evaluation which will draw up the balance sheet of the challenges before ending the pilot stage at the end of this year.”

The Single Customs Territory is funded by Trademark East Africa with an amount of USD 450 thousand for the redeployment of staff, travel expenses, inspection and supervision, information technology, office equipment and assistance. Source: http://www.iwacu-burundi.org

Following a theme of logical progression over the past few years, the WCO has introduced “Communication” as this year’s theme for the 170+ Customs Administrations around the world. Last year’s theme “Innovation” set the platform for the introduction of innovative ideas and business practices, new partnerships, as well as new solutions and technologies.

While still very much in its infancy, the WCO’s Globally Networked Customs (GNC) philosophy will undoubtedly gain more and more traction as administrations iron out their national and regional aspirations and objectives.

The recent agreement on Trade Facilitation at the WTO’s conference in Bali adds further credence to the importance of the principles of the Revised Kyoto Convention (RKC). For the first time we see an attempt to fuse customs principles into a package of binding requirements.

Now, more than ever, Customs needs to work ‘collaboratively’ with all stakeholders.

With Customs and Border Agencies etching out new legal requirements, as well as organisational structures and plans, trade practitioners will likewise have to keep a watchful eye on these developments. Sometimes, not necessarily just for their own needs and obligations in their domestic markets, traders need to ensure that they keep apace with ‘destination’ Customs requirements which in these modern times are all too frequent. By opening its door to the business community, the WCO plays an ever-increasing overarching role in providing the private sector a ‘window’ to its thinking and ideology.

There is nothing nebulous about the “cloud”, especially as it applies to developing countries, a new UNCTAD report says. For businesses and governments in poorer nations to benefit from cloud computing’s increasingly rapid and more flexible supply of digitized information – the sort of thing that enables online marketers to rapidly scale up their information systems in tune with fluctuations in demand – massive, down-to-earth data processing hardware is required. Also needed is extensive broadband infrastructure, as well as laws and regulations that encourage the investment needed to pay for advanced information and communication technology (ICT) facilities and to protect users of cloud services.

Referring to cloud computing, United Nations Secretary-General Ban Ki-moon states in the preface to the report: “This has considerable potential for economic and social development, in particular for our efforts to achieve the Millennium Development Goals and to define a bold agenda for a prosperous, sustainable and equitable future.”

The report shows that cloud computing offers the potential for enhanced efficiency. For example, cloud provisioning may enable small enterprises to outsource some of the information technology (IT) skills that they would otherwise have to provide internally. Companies can benefit from greater storage and computing capacity, as well as the expertise of cloud service providers in areas such as IT management and security.

But the study notes that options for cloud adoption in low- and middle-income countries look very different from those in more advanced countries. While free cloud services such as webmail and online social networks are already widely used in developing nations, the scope for cloud adoption in low- and middle-income economies is much smaller than it is in more advanced economies. In fact, the gap in availability of cloud-related infrastructure between developed and developing countries keeps widening. Access to affordable broadband Internet is still far from satisfactory in developing nations, especially in the least developed countries (LDCs). In addition, most low-income countries rely on mobile broadband networks that are characterized by low speed and high latency and therefore not ideal for cloud service provision.

The report recommends that governments “welcome the cloud but tread carefully”. Within the limits of their resources, infrastructure such as costly data centres must be constructed; at present, developed economies account for as much as 85 per cent of all data centres offering co-location services.

The cloud’s pros and cons

In simple terms, cloud computing enables users to access a scalable and elastic pool of data storage and computing resources, as and when required. Rather than being an amorphous phenomenon in the sky, cloud computing is anchored on the ground by the combination of the physical hardware, networks, storage, services and interfaces that are needed to deliver computing as a service.

The shift towards the cloud has been enabled by massively enhanced processing power and data storage, and higher transmission speeds. For example, some central processing units today are 4,000 times faster than their equivalents from four decades ago, and consumer broadband packages are almost 36,000 times faster than the dial-up connections used when Internet browsers were introduced in 1993.

The potential advantages of cloud computing include reduced costs for in-house equipment and IT management, enhanced elasticity of storage/processing capacity as required by demand, greater flexibility and mobility of access to data and services, immediate and cost-free upgrading of software, and enhanced reliability and security of data management and services.

But there are also potential costs or risks associated with cloud solutions. The UNCTAD report mentions costs of communications (to telecom operators/Internet service providers) and for migration and integration of new cloud services into companies’ existing business processes, reduced control over data and applications, data security and privacy concerns, risks of services being inaccessible to targeted users, and risks of “lock-in” with providers in uncompetitive cloud markets.

Policymakers should waste no time in exploring how the cloud computing trend may affect their economies and societies, UNCTAD recommends. Countries need to assess carefully how best to reap gains from this latest stage in the evolving information economy. In principle, UNCTAD sees no general case for government policy and regulation to discourage migration towards the cloud. Rather, governments should seek to create an enabling framework for firms and organizations that wish to migrate data and services to the cloud, so that they can do so easily and safely. But government policies should be based on a careful assessment of the pros and cons of cloud solutions, and should recognize the diversity of business models and services available. The report underlines that there are multiple ways of making use of cloud technology, including public, private or hybrid clouds, at national, regional and global levels. Source: UNCTAD

Delegates attending the WCO/SACU IT Connectivity Conference – May 2013

Representatives of the SACU member states recently met in Johannesburg to progress developments concerning IT Connectivity and Customs-to-Customs data exchange in the region. The session served as a follow up to the session held last year in February 2012 in Pretoria. The conference was convened by the SACU secretariat under the sponsorship of the Swedish International Development Agency (SIDA), and was once again pleased to have SP Sahu, senior technical expert from the World Customs Organisation, to facilitate the work session over 3 days. Representatives of UNCTAD ASYCUDA were also in attendance to observe developments. UNCTAD currently supports three (soon to be four) of the five SACU Customs administrations. The session provided an opportunity for delegates to progress this work as well as develop a terms of reference for an independent assessment of the two connectivity pilot projects that are currently being pursued between Botswana-Namibia and South Africa-Swaziland, respectively.

IT Connectivity serves as a catalyst for various customs-to-customs cooperation initiatives seeking to bring about a seamless end-to-end flow of information between point of departure and destination. Some examples include export/transit data exchange, approved economic operator, commercial fraud, eATA and at least 5 other key areas of customs mutual exchange. The concept is driven out of the newly establish WCO model known as Globally Networked Customs (GNC). GNC was formally adopted by the WCO Council in June 2012 where a capacity building approach based on protocols, standards and guidelines (PSG) using utility blocks was recognised to provide the most realistic means to achieve efficiency gains, and a more effective way to manage the negotiation of international agreements between customs administrations.

There exist several pilot projects across the globe wherein customs agreements are being piloted under the GNC approach. Development of a Utility Block and supporting data clusters for interconnectivity within SACU and the broader Southern Africa sub-region already commenced at last year’s session. The concept gained sufficient traction and was soon adopted by both SACU and SADC member states as the means to implementing IT connectivity within the respective regions.

A review of the Utility Block and data clusters was conducted to ensure alignment of customs data requirements across the member states. The resulting product now provides a standard ‘data set’ which members agree as the minimum data required to facilitate data exchange and advance risk management needs. It covers export and transit declaration requirements. Two important criteria exist for successful data exchange and data matching. The first being the availability of appropriate legal provision for two countries to exchange data. The second requires the use of an agreed unique identifier. The identifier is important for Customs as well as the trade community.

Delegates were also presented with current and future developments occurring at the WCO, in particular the on-going work being done to formalise standards for the “My Information Package” concept as well as the WCO Data Model, currently at version 3.3. Another interesting on-going development involves a unique Trader ID.

Member states involved in respective pilot programmes are now preparing themselves for an up-coming evaluation, later this year.

GS1 is a non-profit organization dedicated to the development and implementation of global specifications to manage the supply chain, including product identification codes, barcodes and business-to-business standards for the exchange of accurate data. After longstanding cooperation at the technical level, the WCO concluded a Memorandum of Understanding (MoU) with GS1 in 2007 to formalize cooperative ties.

At the invitation of GS1, the Secretary General of the WCO, Kunio Mikuriya, spoke at the GS1 Global Forum 2013 in Brussels on 18 February 2013 where he highlighted the increasing cooperation between the two organizations. Recalling the evolution of Customs with a heightened focus on data management for assessing risks in the supply chain, the Secretary General underlined the importance for Customs to explore the possibility of making use of supply chain specifications that are available in the trade, such as codes and specifications developed by GS1.

He specifically referred to the new WCO Economic Competitiveness Package to explain how Customs contributes to enhancing national competitiveness by facilitating trade using a risk management approach. As this requires the application of information technology, data and message standards, and consignment identifiers, it is important to employ existing technologies and tools in the trade supply chain, through a partnership with business.

Sharing a common interest in supply chain management, including track and trace systems, both organizations have been cooperating in many areas in a complementary manner, as the WCO facilitates Customs-to-Customs and Customs-to- business data exchange while GS1 also facilitates business-to-business data exchange.

The most recent collaboration includes the addition of a barcode function to the Interface Public Members (IPM) – the WCO’s information tool to fight violations of intellectual property rights at borders. Secretary General Mikuriya urged GS1 members to leverage the collaboration with the WCO at the global level by getting in touch with their respective local Customs administrations. GS1 members appreciated his speech and pledged to explore and enhance cooperation with Customs administrations. Source: WCO

For more of the latest news and happenings at the WCO, please follow the news feed alongside (right).

The WordPress.com stats helper monkeys prepared a 2012 annual report for “What Happened to the Portcullis?“. A special thanks to everyone who has browsed regularly, commented or contributed to this blog. I am deeply grateful and appreciative! Mike

Here’s an excerpt:

4,329 films were submitted to the 2012 Cannes Film Festival. This blog had 52,000 views in 2012. If each view were a film, this blog would power 12 Film Festivals

I post this article given it ties together many of the initiatives which I have described in previous articles. The appears to be an urgency to implement these initiatives, but the real question concerns the sub-continent’s ability to entrench the principles and maintain continuity. At regional fora its too easy for foreign ministers, trade practitioners and the various global and financial lobbies to wax lyrical on these subjects. True there is an enormous amount of interest and ‘money’ waiting to be ploughed into such programs, yet sovereign states battle with dwindling skills levels and expertise. Its going to take a lot more than talk and money to bring this about.

Central to pursuing this intra-regional trade aspiration are a series of mechanisms to combine market integration and liberalisation efforts with physical cross-border infrastructure and spatial-development initiatives. Also envisaged is greater policy coordination to advance regional industrial value chains. “Trade facilitation can be broadly construed as interventions that include the provision of hard and soft infrastructure to facilitate the movement of goods, services and people across borders, with SACU remaining the anchor for wider integration in the region,” Davies explains.

Trade programme manager Rick Gurley says that virtually every study on trade in sub- Saharan Africa identifies time and cost factors of exporting and importing as the most significant constraints to regional trade potential. Limited progress has been made by SADC member States and SACU partners to tackle the factors undermining trade-based growth, limiting product diversification and increasing the price of consumer goods, including of foodstuffs. However, far more would need to be done to realise the full potential of intra-regional trade.

Regional Alliance
One high-profile effort currently under way is the Tripartite Free Trade Area (T-FTA), which seeks to facilitate greater trade and investment harmonisation across the three existing regional economic communities of the SADC, the Common Market of Eastern and Southern Africa and the East African Community.

The existing SADC FTA should be fully implemented by the end of the year, with almost all tariff lines traded duty-free and, if established, the T-FTA will intergrate the markets of 26 countries with a combined population of nearly 600-million people and a collective gross domestic product (GDP) of $1-trillion. At that size and scale, the market would be more attractive to investors and could launch the continent on a development trajectory, Davies avers. It could also form the basis for a later Africa-wide FTA and a market of some $2.6-trillion.

However, as things stand today, intra- regional trade remains constrained not merely by trade restrictions but by a lack of cross-border infrastructure, as well as poor coordination and information sharing among border management agencies such as immigration, customs, police and agriculture.Cross-national connectivity between the customs management systems is also rare, often requiring the identical re-entry of customs declarations data at both sides of the border, causing costly and frustrating delays.

USAid’s regional economic growth project, the Southern African Trade Hub, is a strong proponent of the introduction of several modern trade-facilitation tools throughout the SADC – a number of which have already been successfully pioneered. These tools, endorsed by the World Customs Organisation (WCO) Framework of Standards, which offers international best-practice guidelines, are aimed at tackling the high costs of exporting and importing goods to, from, and within Southern Africa, which has become a feature of regional trade and discouraged international investment.

Bringing up the Rear
A country’s competitiveness and the effec- tiveness of its trade facilitation regime are measured by its ranking on World Bank indices and, with the exception of Mozambique, Southern African States perform poorly – with most in the region settling into the lowest global quartile of between 136 and 164, out of a total of 183. “Our transaction costs in Africa across its borders are unacceptably high and inhibit trade by our partners in the private sector,” says WCO capacity building director Erich Kieck. “We need our States to develop good ideas and policies, but the true test lies in their ability to implement them,” he notes.

He adds that not only does trade facilitation require efficient customs-to-customs connectivity, but also demands effective customs-to-business engagement, adding that, while customs units are responsible for international trade administration, they are not responsible for international trade. “The private sector is the driver of economic activity and international trade, and government’s responsibility is to understand the challenges faced by the business community and develop symbiotic solutions,” Kieck notes.

Despite the establishment of regional trade agreements and regional economic communities in Southern Africa, many partner- ships have failed to deliver on their full potential to increase domestic competitiveness.

In a report, African Development Bank (AfDB) senior planning economist Habiba Ben Barka observes that, despite the continent’s positive GDP growth record – averaging 5.4% a year between 2005 and 2010 – it has failed to improve its trading position or integration into world markets. In 2009, Africa’s contribution to global trade stood at just under 3%, compared with nearly 6% for Latin America and a significant 28% for Asia.

“Since 2000, a new pattern of trade for the continent has begun to take centre stage, as Africa has witnessed an upsurge in its trade with the emerging Brazil, Russia, India and China economies. Overall, Africa is trading more today than in the past, but that trade is more with the outside world than internally,” says Ben Barka. She adds that while many African regional economic communities have made some progress in the area of trade facilitation, much greater effort is required to harmonise and integrate sub-regional markets.

To address enduring trade barriers, consensus among business, government and trade regulators appears to lean towards the adoption of one or a combination of five facilitation tools. These include the National Single Window (NSW), the One-Stop Border Post (OSBP), cloud-based Customs Connectivity, Coordinated Border Management (CBM) and Customs Modernisation Tools.

A National Single Window
NSWs connect trade-related stakeholders within a country through a single electronic-data information-exchange platform, related to cross-border trade, where parties involved in trade and transport lodge standardised trade-related information or documents to be submitted once at a single entry point to fulfil all import, export and transit-related regulatory requirements.Mauritius was the first SADC country to implement the NSW and consequently improved its ranking on the ‘Trading Across Borders Index’ to 21 – the highest in Africa. It was closely followed by Ghana and Mozambique, which have also reported strong improvements.

Developed in Singapore, the benefits of government adoption include the reduction of delays, the accelerated clearance and release of goods, predictable application, improved application of resources and improved transparency, with several countries reporting marked improvement in trade facilitation indicators following the NSW implementation.

In South Africa, the work on trade facili-tation is led by the South African Revenue Service (SARS), which focuses on building information technology (IT) connectivity among the SACU member States, and strengthen- ing risk-management and enforcement measures. However, SARS’ approach to the NSW concept remains cautious, Davies explains. “SARS has considered the viability of this option as a possible technological support for measures to facilitate regional trade, but considers that this would fall outside the scope of its current approach and priorities in the region,” he said.

One-Stop Border Posts
As reported by Engineering News in December last year, effective OSBPs integrate the data, processes and workflows of all relevant border agencies of one country with those of another, which culminates in a standardised operating model that is predictable, trans- parent and convenient. An OSBD success story in Southern Africa is the Chirundu border post, where a collaboration between the Zambia and Zimbabwe governments has culminated in a single structure, allowing officers from both States to operate at the same location, while conducting exit and entry procedures for both countries.

Launched in 2009, this OSBP model is a hybrid of total separation, joint border operations and shared facilities in a common control zone. Implementation of the model has reduced clearance times to less than 24 hours, significantly reduced fraudulent and illegal cross-border activity, enabled increased information sharing between border agencies and reduced the overall cost of export and import activities in the area.

Earlier this year, former South African Transport Minister Sibusisu Ndebele indicated that Cabinet was looking into establishing a mechanism that would bring all border entities under a single command and control structure to address the fragmentation in the country’s border operations, particularly at the high-traffic Beitbridge post between South Africa and Zimbabwe. “The ultimate vision is to create one-stop border operations to facilitate legitimate trade and travel across the borders,” he said.

Customs Connectivity and Data Exchange
Improved connectivity between customs limbs in sub-Saharan Africa has perhaps made the most indelible strides in the region, with improved IT connectivity between States identified as a priority by Sacu.

This includes customs-to-customs inter- connectivity, customs-to-business inter- connectivity and interconnectivity between customs and other government agencies. SACU members have agreed to pursue the automation and interconnectivity of their customs IT systems to enable the timely electronic exchange of data between administrations in respect of cross-border movement of goods. “As a consequence of this acquiescence, we have identified two existing bilateral connectivity programmes as pilot projects to assess SACU’s preferred connectivity approach, cloud computing between Botswana and Namibia and IT connectivity between South Africa and Swaziland,” says SACU deputy director for trade facilitation Yusuf Daya. He adds that a regional workshop was recently convened to explore business processes, functions, data clusters and the application of infrastructure at national level to improve and develop intra-regional links.

Coordinated Border Management
The SADC has been a strong proponent of CBM efforts in the region, which promotes coordination and cooperation among relevant authorities and agencies involved in, specifically, the protection of interests of the State at borders. “The union has drafted CBM guidelines for its members on implementation, based on international best practice, and has received indications of interest from several member States,” explains SADC Customs Unit senior programme officer Willie Shumba.He adds that CBM is a key objective of regional integration, enabling the transition from an FTA to a customs union and, eventually, to a common market, through effective controls of the internal borders.

Customs Modernisation
South Africa’s customs modernisation initiative is well advanced and came about following Sars’ accession to the WCO’s revised Kyoto Convention in 2004, which required customs agencies to make significant changes to it business and processing models. These changes included the introduction of simplified procedures, which would have fundamental effects on and benefits for trade and would require a modern IT solution.

Since its inception, the SARS Customs Modernisation Programme has gained tremendous momentum, with amendments to the Passenger Processing System and the replacement of SARS’s Manifest Acquittal System in the Automated Cargo Management system. Further adjustments were made to enable greater ease of movement of goods, faster turnaround times and cost savings, as well as increased efficiency for SARS. This phase included the introduction of an electronic case-management system, electronic submission of supporting documents, the centralisation of back-end processing in four hubs and an electronic release system and measures to enhance the flow of trucks through borders – in particular at the Lebombo and Beitbridge borders.

Proper Planning
AfDB’s Ben Barka warns that, prior to the implementation of any border improvement efforts by countries in Southern Africa, a thorough analysis and mapping of each agency’s existing procedures, mandate and operations should be undertaken.“Based on these findings, a new set of joint operational procedures need to be agreed upon by all involved agencies and must comply with the highest international standards,” she says.

Development coordination between States is essential, as the largest disparity among regional groupings, in terms of intra-regional trade, is clearly attributable to their differentiated levels of progress in various areas, including the removal of tariffs and non-tariff barriers, the freedom of movement of persons across borders and the development of efficient infrastructure. Source: Engineering News.

Delegates from at least 20 African Customs Administrations met in Pretoria, South Africa between 13 and 15 August to advance developments towards a common framework and approach to IT inter-connectivity and information exchange in the region. Convened by the SADC secretariat in consultation with COMESA and Trademark Southern Africa (TMSA), the three day work session focussed on uniform acceptance of the WCO‘s Globally Networked Customs (GNC) methodology, regional awareness of customs developments in the Southern and East African region, as well as joint agreement on customs data to be exchanged between the member states.

Mauritius Revenue Authority (MRA) shared its experience with delegates on the launch of its Customs Enforcement Network (CEN). Kenya Revenue Authority will soon be sharing enforcement information with its MRA counterpart. At least 22 African countries are expected to link up with the CEN network over a period of time. Customs enforcement information is the second pillar of the WCO’s GNC information exchange methodology; the first pillar being Customs information exchange. The latter provides for a holistic approach to the dissemination of common customs data derived from supply chain exchanges, for example declaration information, cargo information, and AEO information to name but a few. This information is vital for trading countries to administer advance procedures and better validate the information being provided by the trade.

Rwanda Revenue Authority introduced it’s RADDex programme which is a web-based IT solution for the exchange of cargo manifest information between participating states in the East African Community (EAC) – see related article below.

SADC and COMESA are rallying their members to participate in the initiative. At the current juncture, various member states have expressed keen interest to participate. While the regional intention is the linking of all customs administration’s electronically, initial developments envisage bi-lateral exchanges between Customs administrations which are ready to engage. The importance of the adoption of the GNC methodology is to ensure that customs connectivity and information exchange is harmonised and consistent across the Southern and East African region irrespective of whether countries are ‘early adopters’ or not.